Electrolux managing director, Kurt Hegvold, has confirmed the company will increase prices on 1 June by between 4.5 and 5 per cent.
“Increases vary by product, by category and by brand, but it is on average 4.5 to 5 per cent. We will be honouring the current price on all orders received up until 1 June and delivered prior to 30 June,” Hegvold told Appliance Retailer.
“We will also continue to honour our promotional pricing during the month of June and ensuring that our retailers are maintaining the margins they were prior, but we will be adjusting our promotional pricing after the end of the financial year,” he said.
Hegvold shared the reasons for the increase that are similar to other companies that have also made similar changes to their pricing.
“This is connected to existing currency issues but also the increasing freight rates we are now anticipating through the third and fourth quarters. We have suddenly seen increased costs due to higher traffic in the USA that have resulted in freight jumping by about 25 per cent.”
Hegvold has confirmed notifications have been sent to retailers informing them of the change in prices.
“In general, retailers understand the pressures that we are under and are accepting of our ambitions to keep our prices relevant to the equity we have built in our brands.”
Hegvold said it has been approximately two years since Electrolux last issued a price rise to the market that was then primarily driven by freight costs.
“Most of that price increase has come out due to deflation and the aggressive nature of the market and the increase in promotional frequency and depth. This will help us offset the impacts of currency in particular which on a full year basis is eliminating about 150 basis points of gross margin due to cost of goods – the price rise gets us some way to covering that off.”